Chapter 5: Industry and Marketplace
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5.1 The Industry
5.1.1 Definition of the Industry
Food and beverages (F&B) is the industry term which refers to all food and beverage needs for an event. The industry specializes in the conceptualization, the making of, and delivery of foods. Restaurants and bars, including hotels, resorts, and casinos are the largest section of F&B employees.
According to Malaysia International Food & Beverages (Mifb),“With its traditional agricultural base and rich natural resources, it encompasses a diverse range of high quality products that are uniquely Malaysian, including canned and frozen food, seafood, herbs and spices, cocoa products dairy products, sugar and confectionary products that are among the food items identified with export potentials and most sought after by international buyers. Indeed, the processed food sector made it to Malaysia's top 10 export earners in year 2008 despite a whopping food import bill of MYR 35 billion.”
5.1.2 Shape of the Industry
“In Malaysia, food processing is an important component within the agro-based industry. This sector accounts for 10% of the country's total manufacturing output with an annual trade of over RM17 billions and exports of over RM10 billions to more than 80 countries around the world.” (Malaysia International Food and Beverages- Food Future) The needs of food processing and packaging equipment and technology had increase rapidly because there are high demands in the processed food and beverages. This has made a major contribution to Malaysian economy.
Confectionery is broken up into three categories: chocolate, non-chocolate, and chewing gum. Candies could be differentiated by water content--hard candies, soft candies, chewing gum and sugarless candies. For Hard candies, they have a water content of not more than 3%. Soft candies, which consists of jelly a type of candies with water content of 7.5% to 20% and non-jelly with a water content of 3%-7%.
The shape of the industry are said to be at a growing stage because with Malaysia’s strategic location in the Asean which provide a getaway for 550 million population in the region and it’s positioning as the international halal food hub makes Malaysia a perfect place for local and international F&B company to invest on. The market for confectionery in Malaysia increased at a compound annual growth rate of 5% between 2004 and 2009. (Datamonitor, 2010). With a share of 48.4%, chocolate category is the lead of Malaysia’s confectionery market. Confectionery has always been the sweet stuff to cheer up the day of the consumers. It is very popular among the younger generation.
5.1.3 Development of the Industry
Candies or confectionery are produced from sugar mixed with other foodstuff like organic acid, milk, cacao, aroma, dyestuff and other edible materials. “Chocolate is by far the largest, with a 55% of the total, while gum holds only a 14% stake but is the fastest-growing segment Consumers in the U.S. spent $8.8 billion on various sweets last year, a 2% increase over 2007 making the United States the largest consumer of candy in the world. Many of the most popular candy bars sold today were developed between the 1890s and 1920 by various candy makers around the country. Rights to many of these candies have been bought and sold many times since they were developed and now are owned by large corporations such as Mars, Hershey Foods, Warner-Lambert, and RJR Nabisco. On average, Americans consume about 25 lb. of candy per capita annually.” (Fletcher, 2006)
Before this, Candy is often dissolved in tea. In Germany, it is an important part of the tea culture and in other country like China, it is used to sweeten up Chrysanthemum tea. Other than that, sugar was said to have medical benefits too. During the early days of European history, they used to giving away "bonbonniere" in birthdays, christening and marriages. The packaging was made of gold, precious stones, crystal or porcelain. Even its contents were of great value as sugar was a costly delicacy, prized for its supposed medical properties.
As years goes by, popular colors and flavours has been added in sugar in order to suits the consumers need. More brands are developing and they are not just focusing on kids any more, in fact they are having their adults market as well. So more and more sugar that is low fat, fruity flavor or chewing gum that is good for teeth are coming out. With the development in the industry, there will be more encouraging increase in the industry.
5.2 The Marketplace
5.2.1 Current Condition of the Marketplace
According to analyst, the confectionery market can be divided into two major sectors which is chocolate confectionery and also the sugar confectionery. Traditionally, in the sugar confectionery market, they have been targeting on child but as suppliers wish to widen their sales, they have been looking for other alternative. As a result, breath freshening products and teeth whitening has been produced in the demand for oral health products.
Consumers has always have negative perception on sugar products and for this, man products are being revamped, with artificial colours and flavours being replaced with fruit juices and other natural alternatives. Candies are not just for kids nowadays, they can be presents for friends, special wedding favors and also young people who love to have some fun in their life.
5.2.2 Changes in Marketplace
Positive
· Revamping of sugar confectionery in the market leads to an improvement and possibilities in the sales of the product.
Negative
· Great competition from the growing brand in the industry especially from the chocolate confectionery is certain a challenge for sugar confectionery to stand out from the crowd.
